A high-speed rail (HSR) linking Singapore and Kuala Lumpur will not be a reality soon. The neighbours have formally agreed to postpone the construction of the 350-kilometre (218 miles) multibillion-dollar link until end of May 2020.
Both countries said the HSR express service is not likely to ply the route before January 2031, or four years later than originally commencement date of Dec 31, 2026. As compensation for the delay, Malaysia will pay Singapore S$15 million ($11 million) before the end of January 2019.
The new agreement was signed by Malaysia's Economic Affairs Minister Azmin Ali and Singapore's Transport Minister Khaw Boon Wan at the Prime Minister's Office in Putrajaya on Wednesday (Sept 5) afternoon.
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The Singapore Government itself had spent more than S$250 million on the project by the end of May this year, said Mr Khaw in July. This included costs for consultancies to design the civil infrastructure, costs for dedicating manpower to oversee and deliver the project and costs for land acquisition.
The HSR is among several mega projects approved by the previous Malaysian government that have come under review, as the Pakatan Harapan administration relooks the country's finances after winning the May general election.
Faced with liabilities of more than 1 trillion ringgit ($241 billion), Malaysia has been seeking ways to cut costs and has been pushing to postpone the project aimed at trimming the land journey time between the two cities to 90 minutes, from as long as five hours now.
During the suspension period, both countries will "continue to discuss the best way forward for the HSR project with the aim of reducing costs", the joint statement said.
Sources: Bloomberg.com, channelnewsasia.com